January 1, 2002

A look back: 2001 tough on Open Source businesses, code/speech rights

Author: JT Smith

- By Grant Gross -

In many ways, 2001 wasn't a good year for the Open Source and Free Software communities. Many Open Source-related businesses struggled to find working business plans; the U.S. government explored ways to limit the freedom to code; community nemesis Microsoft took all kinds of potshots at Linux and Free Software license; and it looks as though Microsoft will get off with a slap on the wrist for its antitrust violations. But through it all, the community of Open Source/Free Software coders and users continued to thrive and crank out good software.

The year started out with the release of the long-anticipated Linux 2.4 kernel, with its broader support for USB, PCMCIA and, perhaps most important, enterprise server architectures. You couldn't swing a virtual dead cat last January without hitting a story about what the 2.4 kernel could or couldn't do.

The enterprise -- or big business -- focus of the 2.4 kernel probably contributed to some cool things happening during the year, including IBM promoting the heck out of Linux when most Linux companies didn't have a dime to spare for marketing. IBM's Linux PR team was busy as a beaver in 2001, cranking out press releases ranging from pre-packaged Linux clusters to a Linux test drive program for small- and medium-sized businesses.

For many other Linux- and Open Source-related businesses, 2001 was not a banner year. Of course, the fate of Open Source businesses wasn't much different than other tech businesses.

Among the leading Open Source businesses that laid off employees this year: MandrakeSoft, SuSE, Penguin Computing, Caldera, Lineo, and NeTraverse, and that's only a partial list of names. Several other companies, including high-profile Linux desktop company Eazel, went one step further and closed up shop.

Turbolinux and Linuxcare first announced a merger in February and then called it off in May. Linuxcare then announced layoffs. Turbolinux's layoffs happened before the merger was called off.

Linux gaming company Loki Software filed for bankruptcy in August but continued to release games.

Then there was the strange case of Corel. The Canadian company had been heavy into Linux until Microsoft invested in the company in 2000. After all kinds of rumors to that effect, Corel sold its Linux unit to a startup called Xandros Corp.

Bucking the trend was French Linux distributor MandrakeSoft, which went public on the EuroNext Marché Libre.

In short, it wasn't a good year to be an employee at an Open Source company, but then, your job wasn't safe this year at all kinds of tech giants, including Palm, Sun Microsystems, and Compaq.

The good news, not that stock prices have anything to do with layoffs or company performance as a whole, is that stock prices seem to be rebounding from lows following the Sept. 11 terrorist attacks on the United States. At least investors should be happy with stock performance in the last couple of months.

For example, Red Hat ended the Dec. 31 trading day at 7.10. That's lower than Red Hat's 52-week high of 10.125 back in late January, but it's a heck of a lot better than the 2.40 it posted a couple of weeks after Sept. 11. Of all the companies that experimented with Linux over the past couple of years, Red Hat seems to be the one with the traction -- the company actually reported quarterly profits earlier this year, although those ever-present "charges" don't seem to count.

Caldera seems to be rebounding as well, although its stock is still closer to the 52-week low than the year's high. Caldera ended Dec. 31 at 0.86, up from a low of 0.22, but down from a high of 4.00 in early 2001.

Borland Software actually peaked for the year this past month at 17.49. Its 52-week low was 5.40, which came in late March, not September. Borland closed the year at 15.66.

Programming freedom, or the lack thereof

If 2001 won't be remembered as the Year of the Disappearing Open Source business plan, it might be remembered as the Year of the Assault on Online Free Speech.

Under the U.S. Digital Millennium Copyright Act, a lawsuit continued against 2600.com for linking to the DeCSS code, which allows users to copy DVDs and play them on Linux machines. The latest in that case: a U.S. Second Circuit Court of Appeals decision affirming a lower court's ruling against 2600.com.

A similar lawsuit using California's trade secret laws progressed against several other Web sites that posted the DeCSS code. This fall, a California appeals court overturned an injunction against posting the code.

Stayed tuned. Neither of those court battles is over yet.

Another case with just as much potential impact is Princeton Professor Ed Felten's fight against the Secure Digital Music Initiative. Felten and his research crew cracked open the SDMI's watermarking techniques and then were threatened with a lawsuit under the DMCA if they published the results in a research paper. The good news is that Felten's team finally presented its research at a USENIX conference in August. The bad news is that a judge dismissed Felten's case against the music industry, and all kinds of questions remain over the DMCA and its anti-circumvention provisions, which outlaw any technology that circumvents other technology.

The DMCA was even used to arrest Russian programmer Dmitry Sklyarov after he spoke at a U.S. technology convention this summer. Sklyarov created a program that allows users to read Adobe e-Books without buying an Adobe program, and that landed in him jail for months. Sklyarov was released in December, but the legal wrangling involving charges against his company continues. Reports had him released for agreeing to testify against his boss, but he still maintains the innocence of both himself and his employer.

As if the DMCA weren't enough of a drag on generally accepted good ideas like free speech, Congress is now considering a law that would require anti-copying controls on every piece of hardware -- and potentially software -- sold in the United States. The Security Systems Standards and Certification Act hasn't gone anywhere in Congress after being drafted early this fall, but it hasn't been run out of town, either.

See also, The New York Times' The Year in Internet Law.

Microsoft vs. Open Source

The boys in Redmond took several shots at the Open Source and Free Software communities this year. As far as we can tell, Microsoft's main objection seems to the the GNU General Public License, which requires people who build software based on a program released under the GPL to also release their source code. Microsoft seems to confuse that issue with several others, however.

Jim Allchin, Microsoft Windows operating system chief: Open Source threatens innovation and is just plain un-American. Tim O'Reilly offered some context to those remarks.

Craig Mundie, Microsoft senior vice president: Open Source forces intellectual property into the public domain and mirrors the failed dot-com business models. This speech probably got closest to Microsoft's confused problems with the GPL, it seems, while Mundie was trying to flack for Microsoft's "shared source" initiative. To be fair, Mundie actually showed up at an Open Source convention and sparred with the crowd.

CEO Steve Ballmer: Microsoft's own Hotmail service] If the government wants to put something in the public domain, it should. Linux is not in the public domain {We're not sure what this means. With Linux, anyone can download it for free and view the source code. That seems more in the public domain than any Microsoft product]. Linux is a cancer that attaches itself in an intellectual property sense to everything it touches [We think he means the GPL, not Linux, but that's still not true -- there are plenty of software packages that run on Linux that are not GPLed]. That's the way that the license works."

Antitrust? So what?

It appears as though the multi-year U.S. government antitrust case will come to a whimpering end sometime in 2002, with the software giant getting off with a slap on the wrist. It seems like the George W. Bush administration is doing everything it can to settle the case and make it go away, and one of the remedies Microsoft is proposing for itself is giving away a billion dollars worth of software and hardware to schools, what critics say is an attempt by Microsoft to use the settlement to legally monopolize the schools market. Several Open Source companies and educational projects are banding together to fight that proposal.

Meanwhile, nine states that rejected the proposed federal settlement are proposing their own remedies. They're also accusing Microsoft of delaying the remedy hearings.

The beat goes on

It sounds like a year of bad news, doesn't it? While Open Source companies laid off people and Microsoft took potshots, developers just kept on cranking out good Open Source software.

Among the hotly debated issues of Open Source software development: Is Linux ready for the desktop?

One computer veteran said no way, based on his experience installing Linux for three friends. Other Linux fans kept hope alive, saying true competition with Windows was just around the corner.

However, some of the most convincing information came in the form of people whose offices or classrooms have switched. Despite continued claims that Linux is too difficult for the average user, the city of Largo, Florida, is using Linux on desktops, and yes, office workers can figure it out. In other places, school kids are using Linux with little problem.

Reviews of the latest releases by major Linux distributions are also getting kudos for their ease of use. Looking for a flavor of Linux that you can use on the desktop? Try Red Hat 7.2, SuSE 7.3 or Mandrake 8.1. A couple of other distributions show promise as well, including Redmond Linux.

The KDE and GNOME desktop environment camps also kept churning out code to make Linux easier to use on the desktop. Dozens of other Open Source projects, too numerous to mention here, also made significant improvements.

In other Linux news, there was some turnover near the top of the kernel team, as Alan Cox turned over maintenance of the 2.4 kernel to Marcelo Tosatti.

Other 2001 wrap-ups

If you're interested in a timeline approach to the year in Linux, check out LWN.net's Linux Timeline. It's quite complete.

LinuxPlanet has its best and worst of picks for 2001.

Open for Business also has an interesting editorial about what the tough economic times in 2001 could mean for Open Source software.

The stats

For all you stats lovers out there: NewsForge published or linked to approximately 13,600 stories in 2001, of which approximately 620 were our original reports. Some of the readers' favorites over the past year, in case you missed them:

News reporting

Linuxgruven leaves students and employees in limbo

MandrakeSoft loses more than CEOMicrosoft's Passport service: No Marylanders allowed?

Microsoft's stats.zone.com running on Linux/Apache

Linux dogs MS at the XP expo and wins (the battle, not the war)

Secretaries use Linux, taxpayers save millions

F*** you, Code Red

Senator Fritz Hollings (D-Disney) avoids talking about SSSCA

Disney Channel cartoon portrays music downloads as evil

LinuxOne keeping a low profile while talking merger


90% Windows, 5% Mac, 5% Linux? Not true!

Microsoft to Open Source editor: Register licenses, or else

Does this article violate the DMCA?

We take this minute for something really important (honoring Sept. 11 victims)

Making Linux look harder than it is

Why NewsForge hasn't written about Lindows

Reviews and how-tos

Are top-of-the-line CPUs worth the premium price?

Gaming review: Uplink for Linux puts you inside world of high-tech espionage

Netscape 6.2: This one works

Review: AMD Duron 'Morgan' 1GHz CPU

Joining the Round Table: How to get started developing for the Linux desktop

Comparison: Red Hat 7.1 and Mandrake 8.0

LinuxWorld: Preview of dual-processor DDR Athlon Linux performance

Whew! That's a lot of good stuff -- we hope you enjoyed it. As always, please let us know what we're doing well and what we could do better. And, oh, Happy New Year!


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